About the Landlocked Developing Countries (LLDCs)
Lack of territorial access to the sea, remoteness and isolation from world markets and high transit costs continue to impose serious constraints on the overall socio-economic development of landlocked developing countries. Their sea borne trade unavoidably depends on transit through other countries. Additional border crossings and long distance from the market substantially increase the total expenses for the transport services.
The economic performance of landlocked developing countries reflects the direct and indirect impact of geographical situation on key-economic variables. Landlocked developing countries are generally among the poorest of the developing countries, with the weakest growth rates, and are typically heavily dependent on a very limited number of commodities for their export earnings. Moreover, of 31 landlocked developing countries 16 are classified as least developed.
The remoteness from major world markets is the principal reason why many landlocked developing countries have not been very successful in mitigating consequences caused by their geographical handicap as compared to landlocked countries in Europe. Landlocked developed countries of Europe are surrounded by major developed markets and their seaborne trade accounts for a relatively small part of their external trade. Their export is mainly high value added products and their distance from the seaport is relatively short.
The distances involved in most cases of landlocked developing countries are excessive. Kazakhstan has the longest distance from the sea (3,750 km), followed by Afghanistan, Chad, Niger, Zambia and Zimbabwe with distances from the nearest seacoast in excess of 2,000 km. Transit time for goods of landlocked developing countries is extremely long because of their long distance, difficult terrain, road and railway conditions and inefficiency of transit transport.
In most cases their transit neighbours are themselves developing countries, often of broadly similar economic structure and beset by similar scarcities of resources. The recorded trade between landlocked and transit developing countries tends to be relatively insignificant. In most cases, the transit developing countries are in no position to offer transport systems of high technical and administrative standards to which their landlocked neighbours might link themselves effectively by the development of their own internal transport systems.
There is a clear correlation between distance and the transport costs. High transport costs erode the competitive edge of landlocked developing countries and trade volume. The trade reducing effect is strongest for transport intensive activities that are dependent on exports or imported intermediate goods for production. Most landlocked developing countries are commodity exporters. According to UNCTAD estimates based on the IMF balance of payment statistics, on average landlocked developing countries spent almost two times more of their export earnings for the payment of transport and insurance services than the average for developing countries and three times more than the average of developed economies.
Indeed, high transport costs facing landlocked developing countries have become a far more restrictive barrier to trade for these countries than tariffs. Tariffs for Canada, the European Union, Japan and the United States will range from 3 percent to 7 percent on goods originated from most landlocked developing countries. Then landlocked developing countries on average pay almost three times higher for transport services than these tariffs. Most landlocked developing countries benefit from recent initiatives to provide greater market access for goods of least developed countries.
To deal with the constraints facing landlocked countries, the International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation was held in Almaty, Kazakhstan, in August 2003. It adopted the Almaty Programme of Action: Addresssing the Special Needs of Landlocked Developing Countries within a New Global Framework for Transit Transport Cooperation for Landlocked and Transit Developing Countries and the Almaty Ministerial Declaration.